Cryptocurrency Review: How to buy and how to use

Last updated on July 28, 2022
PAUL TURNERPAUL TURNER

So, you’re interested in learning more about the cryptocurrency world? Do you want to figure out how to acquire Bitcoin, Dogecoin, Ethereum, and other cryptocurrencies? Are you interested to know what are the benefits of using crypto and what are the best and safest ways to do so? This might seem difficult at first but fortunately, learning the ropes can be rather straightforward, and we’re here to help.

In this article, we will discuss how easy it can be to buy and use different cryptocurrencies safely, along with the benefits of this new payment method and where to do so. We will also explain some of the most frequently used terminologies like crypto exchanges, Crypto exchange and trading fees, and trading platforms.

Don’t need an explanation? Do you think crypto is the best way to donate? Visit our donations page to do your part in making an effective difference today.

Discussing cryptocurrency trading and cryptocurrency exchanges.

What Is a Cryptocurrency?

Cryptocurrencies – commonly known as crypto – are a rapidly expanding kind of digital payment that is gaining acceptance throughout the world. Other than being used by crypto traders for crypto traders and trading, cryptos can provide various benefits over previously traditional payment methods such as speedier transactions, tax advantages, and increased security.

This can become an in-depth and tricky topic much the same as conventional currencies, but broadly speaking crypto is a digital asset that can be used quickly and safely online much as cold hard cash is used in shops and markets worldwide.

Cryptocurrencies and fiat currencies

Fiat currencies are the physical government-issued bills and coins that we all know well, such as the US dollar which has its value regulated by the Federal Reserve. Cryptocurrency, however, is a digital asset having its value derived from the digital blockchain it is built on. For more detailed information about blockchain technology check out this article by Binance.

Cryptocurrencies work much the same as fiat currencies in the way that:

  • They are both mediums of exchange.

  • They can both be a store of value.

  • Both cryptocurrency and fiat currencies can be used online for purchasing and trading.

So are Cryptocurrency and Fiat currencies the same?

While cryptocurrency and fiat currencies do share much of the same usability they also have some major differences…

  • Cryptocurrency can’t be stored in your bank account.

  • The value of fiat currencies is more stable than that of cryptocurrencies.

  • A government or an authority backs and guarantees fiat currency. Currently, there is no government backing for cryptocurrency.

Cryptocurrencies may be used by anybody, at any time, anywhere in the world without the need for a bank or a government. This is considered the most ground-breaking characteristic of cryptocurrencies and why they are fast becoming one of the most popular ways to send and receive payments online.

Let’s go through the most known cryptocurrencies

There have been lots of new cryptocurrencies created since the creation of the original Bitcoin. Partially due to Bitcoin’s massive popularity, but also due to the possibilities of the new technology, there have been new cryptocurrencies and digital assets created using the same technology.

This new technology is called blockchain and is what was used to create the original Bitcoin. This technology, however, can be used to serve a wider variety of functions rather than only sending and receiving digital assets online. These extra applications are how newer cryptocurrencies are trying to make their space in the emerging cryptocurrency market.

Let’s take a look at some of the most popular cryptocurrencies.

Bitcoin (BTC)

Bitcoin is a decentralized digital currency that may be bought, sold, and exchanged without the use of an intermediary such as a government or bank. It is a type of digital currency. However, unlike fiat currencies, it is not controlled by a central bank. Instead, it is controlled and regulated by hundreds of computers worldwide that constantly cross-check transaction records between each other.

Bitcoin, the first and most popular cryptocurrency by market cap and trading volume, was introduced in 2008 and launched in 2009. It gives users the opportunity to both send and receive digital money.  It is appealing for some users due to it being an uncensored, secure, and cheaper alternative to transferring fiat currencies online.

To learn more about BTC visit- https://academy.binance.com/en/articles/what-is-bitcoin

Ethereum (ETH)

Ether (ETH), which debuted in 2015, is now the second-largest cryptocurrency by market capitalization, after only Bitcoin. Ether is a cryptocurrency that is used on the larger Ethereum network. There are some key distinctions between Ethereum and the original cryptocurrency. In contrast to Bitcoin (BTC), Ethereum is designed to be much more than a means of trade or a store of assets. 

To learn more about ETH visit- https://academy.binance.com/en/articles/what-is-ethereum

USDT

Otherwise known as Tether, USDT is one of the first and most popular cryptocurrencies of a group called stablecoins. The purpose of stablecoins and USDT is to try and decrease price volatility by anchoring their market value to a fiat currency or other external reference. This is due to most digital currencies, like Bitcoin, going through regular bouts of extreme volatility.

USDT and other stablecoins aim to attract users by smoothing out price swings making them less susceptible to the constantly fluctuating crypto market. USDT’s value is directly tied to the value of the US dollar making it a stable and safe choice for users who don’t want to have their assets influenced by the sometimes volatile crypto market.

To learn more about USDT visit- https://academy.binance.com/en/articles/what-is-tether-usdt

NFT

Non-fungible tokens (NFTs) are different from cryptocurrencies. They are cryptographic tokens that represent a single asset. NFTs are tokenized representations of digital or physical assets. Within a blockchain network, they provide verifiable evidence of ownership over an asset.  NFTs differ from cryptocurrencies as they are not interchangeable with one another which introduces the factor of scarcity into the digital market.

To learn more about NFTs visit- https://academy.binance.com/en/glossary/non-fungible-token-nft

Key Points

  • There are lots of different cryptocurrencies that serve different and specific purposes.

  • Bitcoin is the largest cryptocurrency in terms of market value, user base, and popularity.

  • Stablecoins, such as USDT, are safe choices for more cautious users.

  • NFTs are not cryptocurrencies but are still a new type of digital asset.

Where can I buy Crypto?

You can’t currently use your bank to buy crypto yet although several institutions are attempting to make this possible in the future. So when it comes to buying crypto you can either use a crypto broker or a crypto exchange. In this article, we will discuss using a crypto exchange as they are the most easily accessible method for most people with an internet connection.

Crypto exchanges

A Cryptocurrency exchange is an online marketplace where buyers and sellers can purchase cryptos and have access to cryptocurrency trading. Crypto exchanges frequently offer low trading fees for using them, but at first glance and for new and inexperienced buyers, they can have complicated interfaces with many kinds of trading along with detailed performance charts. This might be overwhelming to inexperienced crypto investors but with a quick site tour and a little research, their user-friendly interfaces will become easy to navigate.

There are currently hundreds of online crypto exchanges that allow you to buy, sell, and trade digital cryptocurrencies, of which Coinbase, Gemini, and Binance.US are three of the most popular, and widely considered the best crypto exchanges. While the conventional trading interfaces of these organizations may be intimidating to newbies, particularly those with no prior experience in trading crypto or stocks, once you create your crypto exchange account they also provide user-friendly easy buy choices. Each crypto exchange platform comes with its own transaction and trading fees so make sure to check them out before making your deposit.

Best crypto exchanges to use and their security measures.

Crypto Exchange & Trading Fees

Most crypto exchanges charge somewhere between 0% and 1.50% per transaction, depending on the type of transaction. This can be in the form of a bank transfer fee, transaction fee, trading fees, or withdrawal fees. Fees vary depending on the exchange platform you choose so make sure to check their terms and condition before choosing your best crypto exchanges for you.

For example, based on these numbers, it means that if you’ve set aside $100 to invest in cryptocurrency, the charge you’ll pay for that transaction might range from $0 to $1.5 on average.

Security measures

Experienced cryptocurrency users often take their assets off the crypto exchange platform and into their own storage once a transaction is completed. Newer users depositing on digital currency exchange, however, usually keep their crypto assets on the exchange itself. 

This emphasizes the need to carefully choose your exchange and to check and take note of their measures of securely looking after your crypto asset. It’s also a good idea of looking into ways of storing your crypto yourself.

Where to store your digital currencies.

Where to store my crypto?

Now you’re a crypto owner, one of the most important pieces of information you should know is how to keep it safe. The same way a bank looks after your money you should look after your crypto asset. Luckily there are many different ways to store your crypto and keep it safe such as keeping it in a cold wallet, hot wallet, custodial wallet, or a physical (paper) wallet. Each of these has its own pros and cons, so let’s take a look at them in more detail.

Custodial Wallets

A custodial wallet can be regarded as the preferred method of storing your crypto. A third party stores your cryptocurrency for you, either a cold wallet (offline wallet) or hot wallet (online wallet), or even a combination of both.

When purchasing crypto via cryptocurrency exchanges, applications, or brokers, it is often placed in a custodial wallet under their control. If you wish to keep it, you may have it transferred from the exchange to your own cold wallet or hot wallet.

This option however isn’t available, from every cryptocurrency platform. There are certain stock brokers and crypto exchanges that only have options for you to purchase and sell cryptocurrency but not transfer it. This means that your only option is to use their custodial wallet.

Cold Wallets

A cold wallet is a small piece of hardware similar to a flash drive that is kept offline. Cold wallets connect to your computer and use the internet to transfer and receive cryptocurrencies, but otherwise, they keep your assets offline. A cold wallet is the most popular method of keeping cryptocurrencies safe.

Let’s take a quick look at how cold wallets work with your cryptocurrency:

  • Each hardware wallet can only hold particular types of cryptocurrency. Some products can hold many different types of crypto assets (up to more than 1,000 coins) while others products are made only to hold a few types.

  • Once your cold wallet is connected to your computer, you will be able to generate an address that is used to send and receive cryptocurrency into the wallet.

  • Cold wallets can send and receive cryptocurrency to one another via the internet through their generated address.

  • A recovery phrase is included with each cold wallet (this is known as a recovery seed). If you lose your physical cold wallet, you can use this recovery seed to retrieve your crypto from the device. Much the same as you keep the password to your bank account protected, It’s critical to keep this recovery seed protected since anyone who has it might steal your cryptocurrency. 

Storing your crypto offline is often regarded as the most secure method, and many large platforms also utilize this method to protect the majority of their own cryptocurrency. This is because while offline, hackers cannot steal your cryptocurrency. A cold wallet is a solid investment for those storing large quantities of crypto. There are various highly rated cold wallets ranging in price starting at around $50 up to $150.

Hot Wallets

Hot wallets are an online cryptocurrency storage program. Hot wallets are often offered as mobile and desktop applications, although there are also some internet-based versions.

Here are a few of the major advantages of hot wallets:

  • They can offer you full control over your cryptocurrency assets.

  • Most are usually free of charge.

  • They are simple to use. You may send and receive crypto extremely rapidly with this sort of wallet.

  • Hot wallets, like hardware wallets, include a recovery phrase (recovery seed). If at some time you lose access to your hot wallet, you may use this recovery seed to recover your cryptocurrency.

There is however one major issue with hot wallets. They are vulnerable to hacking since they hold cryptocurrency online. Even while the chances of this happening are low and many people use hot wallets without incident, it’s likely not a risk anyone would be willing to bear with large amounts of cryptocurrency.

Physical (Paper) Wallet

A paper wallet is another physical crypto wallet which is also another form of cold storage.  Paper wallets are physical printouts containing the public keys and private keys of your crypto, typically in the form of a series of alphanumeric symbols and also as scannable QR codes.

These keys are used to conduct bitcoin transactions. You receive cryptocurrency using a paper wallet and the public keys. To transmit cryptocurrency from your wallet, you must first scan both the public keys and private keys.

Paper wallets, like hardware wallets, provide additional protection by storing your cryptocurrency offline and away from hackers. Making your own is also essentially free, making them excellent if you want maximum protection at the least possible expense.

This method, however, as with other types of storage also has its own disadvantages. The biggest disadvantage is that paper wallets are quite a long-winded method of storing your crypto. While anybody may follow online instructions to create their own paper wallet, hardware wallets are far more straightforward and user-friendly, especially for those new to buying and using crypto.

Donate or trade crypto.

Crypto Donation

People might choose cryptocurrency donations for a multitude of reasons. This can be because they are quicker, more efficient, and more secure than fiat currencies and cheques. Whatever your motivation is, donating in crypto is a fantastic method to help those in need while simultaneously benefiting from the numerous advantages this new payment system offers.

Why Crypto?

Donating with cryptocurrency can make cross-border money transfers considerably easier and faster than foreign donations in normal fiat currencies. Cryptocurrency transactions don’t require the wait time needed for a bank to validate and then process a cryptocurrency transaction like with a fiat transaction.

Tax Deduction

People choose to contribute cryptocurrencies to NGOs for a variety of reasons. It’s quick, easy, and enjoyable.  However, there is another major reason individuals donate cryptocurrency and that is the tax benefits.

Cryptocurrency donations to nonprofits are tax deductible and do not trigger a taxable event, meaning neither party pays capital gains tax and the full amount is tax deductible for the donor. For US donors, you should report your donation to the IRS to realize these tax benefits.

Donate and help us with our cause

FAQs

Is it safe to use crypto?

The term “cryptocurrency” refers to the use of encryption to verify its transactions. This means that specialized coding is required in order to store and send crypto data between digital wallets. This means that using crypto is inherently safe but market price fluctuations can mean that the value of the asset is volatile meaning it might be safer to use a stable coin instead of one of the market leaders such as Bitcoin.

What’s the most stable crypto?

There are many stable cryptos called stablecoins. One of the most popular of these is Tether (USDT). This crypto is linked (Tethered) to the value of the U.S Doller and makes it a safe and secure option for online transactions.

Can I donate crypto for FFLG?

Yes! We can accept cryptocurrency donations and think it is one of the best ways to do so. Visit our donations page to make a donation and play your part in fighting THE HUNGER CRISIS today.

How many children can $10 feed?

A $10 donation can provide food for as many as 20 children. If you can spare a little more a donation of $50 can feed up to 200 children. As you can see from these figures, your donation can go a very long way. Donate Today!

Why donate crypto to Food For Life Global?

Food For Life Global is we are the most cost-efficient food relief network in the world and charities such as us have turned their attention to cryptocurrency donations as they can be a more efficient, cost-effective, and rapid option for donors to get their contribution to us and to our cause.

 Your cryptocurrency and fiat donations enable us to extend the reach and effect of our organization and address the fundamental cause of hunger and societal concerns  by delivering our healthy, vegan food aid to children and families in need,

Have you got it all figured out? Do you think crypto is the best way to donate? Visit our donations page to make a difference today.

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